Leases

6 Months Ended

Jun. 30, 2019

Leases [Abstract]

Leases

We have an operating lease for our corporate offices in Canada and finance leases for furniture and equipment. Our leases have remaining lease terms of twenty-one months to fifty months, and our primary operating leases include options to extend the leases for four years. Future renewal options that are not likely to be executed as of the balance sheet date are excluded from right-of-use assets and related lease liabilities.

We report operating leased assets, as well as operating lease current and noncurrent obligations on our balance sheets for the right to use the building in our business. Our finance leases represent furniture and office equipment; we report the furniture and equipment, as well as finance lease current and noncurrent obligations on our balance sheet.

Generally, interest rates are stated in our leases for equipment. When no interest rate is stated in a lease, however, we review the interest rates implicit in our recent finance leases to estimate our incremental borrowing rate. We determine the rate implicit in a lease by using the most recent finance lease rate, or other method we think most closely represents our incremental borrowing rate.

The components of lease expense were as follows:

	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Operating lease cost	$	5,653	$	11,306
Finance lease cost:
Amortization of leased assets	$	2,670	$	5,253
Interest on lease liabilities		431		932
Total finance lease cost	$	3,091	$	6,185

Supplemental cash flow information related to leases was as follows:

	Six Months Ended June 30, 2019
Cash paid for amounts included in leases:
Operating cash flows from operating leases	$	10,954
Operating cash flows from finance leases	$	932
Financing cash flows from finance leases	$	4,281
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	-
Finance leases	$	-

Supplemental balance sheet information related to leases was as follows:

	June 30, 2019
Operating leases:
Operating lease right-of-use assets	$	79,275
Current portion of operating lease obligations	$	16,492
Operating lease obligations, net of current portion		63,136
Total operating lease liabilities	$	79,628
Finance leases:
Property and equipment, at cost	$	52,527
Accumulated depreciation		(31,515	)
Property and equipment, net	$	21,012
Current portion of finance lease obligations	$	9,364
Finance lease obligations, net of current portion		7,796
Total finance lease liabilities	$	17,160

	Six Months Ended June 30, 2019
Weighted Average Remaining Lease Term
Operating lease		4.2 years
Finance leases		1.8 years
Weighted Average Discount Rate
Operating lease		9.0	%
Finance leases		9.7	%

Upon adoption of the new lease standard, discount rates used for existing leases were established at January 1, 2019.

A summary of future minimum payments under non-cancellable operating lease commitment as of June 30, 2019 is as follows:

Years ending December 31,	Total
2019 (remaining months)	$	11,261
2020		22,522
2021		22,522
2022		22,522
2023		15,015
Total lease liabilities	$	93,842
Less amount representing interest		(14,214	)
Total		79,628
Less current portion		(16,492	)
	$	63,136

The following is a schedule of minimum future rentals on the non-cancelable finance leases as of June 30, 2019:

Year ending December 31,	Total
2019 (remaining months)	$	5,224
2020		10,447
2021		2,792
Total minimum payments required:		18,463
Less amount representing interest:		(1,303	)
Present value of net minimum lease payments:		17,160
Less current portion		(9,364	)
	$	7,796

Disclosures related to periods prior to adoption of ASC 842

Minimum future lease payments under lease obligations as of December 31, 2018 are as follows:

Year Ended December 31,	Capital			Operating
2019	$	10,222 29,779
2020		10,222			38,202
2021		2,736			38,202
2022		-			38,202
2023		-			25,477
Total future minimum lease payments		23,180		$	169,862
Less amount representing interest		(2,484	)
Present value of net minimum lease payment		20,696
Less current portion		(8,580	)
	$	12,116